Full-service hotels in the United States posted a 1.8 percent year-over-year (YOY) increase in profit per room in Q1 2018. This marks the third consecutive year of GOPPAR growth for the period, according to the latest poll of full-service U.S. hotels from HotStats.
The profit growth was driven by a 2.2 percent increase in TrevPAR as hotels delivered record revenue increases across all departments. The 2018 over Q1 2017 TrevPAR growth contributed to the compound annual growth rate (CAGR) increase of 5.0 percent per annum over the last four years—to $259.68 in Q1 2018—an uplift of almost $20 from Q1 2015.
Even as profits grow, full-service hotels in the United States are wrestling with rising costs. Labor has grown to 35.8 percent of total revenue in Q1 2018 from 33.4 percent in Q1 2015.
Even though GOPPAR reflects a CAGR of +2.9 percent per annum over the last four years, HotStats says that the froth may be coming off profit conversion. GOP as a proportion of total revenue fell to 37.2 percent in Q1 2018, from 37.3 percent in Q1 2017. Moreover, flow through in the last two years has fallen from 51 percent in Q1 2017 to 31 percent in Q1 2018.
U.S. Hotel Market Profit & Loss Key Performance Indicators (in USD)
|
KPIs |
Q1 2015 |
Q1 2016 |
Q1 2017 |
Q1 2018 |
Year-on-Year Mvmt |
CAGR Mvmt Q1 2015 -Q1 2018 |
|
RevPAR |
$146.48 |
$150.82 |
$155.96 |
$158.66 |
+2.2% |
+2.6% |
|
TrevPAR |
$240.23 |
$244.48 |
$254.01 |
$259.68 |
+3.2% |
+5.0% |
|
Labor Costs as a Percent of Total Revenue |
33.4% |
33.8% |
35.4% |
35.8% |
+0.3 pts |
– |
|
GOPPAR |
$88.47 |
$89.88 |
$94.76 |
$96.51 |
+1.8% |
+2.9% |
|
GOP as a Percent of Total Revenue |
36.8% |
36.8% |
37.3% |
37.2% |
-0.1 pts |
– |
